Third Quarter Highlights
- Net income of $3.6 million for the third quarter of 2017, an increase of 16.2% over the third quarter of 2016
- Book value per share of $19.79 and tangible book value per share of $18.87 as of September 30, 2017, an increase of $1.07, or 5.7%, and $1.13, or 6.4%, respectively, since December 31, 2016
- Loan growth of $50.9 million in the third quarter of 2017
- Deposit growth of $72.4 million, or 7.3%, in the third quarter of 2017
MANITOWOC, Wis., Oct. 20, 2017 (GLOBE NEWSWIRE) -- County Bancorp, Inc. (NASDAQ:ICBK), the holding company of Investors Community Bank, a commercial bank headquartered in Manitowoc, Wisconsin, reported net income of $3.6 million, or $0.52 diluted earnings per share, for the third quarter of 2017, compared to net income of $3.1 million, or $0.46 diluted earnings per share, for the third quarter of 2016, which represents a 16.2% increase to net income year-over-year. This represents a return on average assets of 1.11% for the three months ended September 30, 2017, compared to 1.04% for the three months ended September 30, 2016.
“Our third quarter results were positive, with solid loan growth from both the agricultural and commercial banking teams,” stated Timothy J. Schneider, President of County Bancorp, Inc. and CEO of Investors Community Bank. “Our net income for the quarter was also better than the first two quarters, primarily due to increased non-interest income that was driven by a pickup in secondary market loan sales, as well as a decrease in provision for loan loss expense.”
“Our loan pipeline for both commercial and ag continues to be solid. We remain confident in our ability to continue to develop loan growth in both sectors,” added Schneider. “With regard to credit quality, our non-performing assets as a percent of total assets improved slightly for the quarter. The dairy sector, although improved from last year due to an increase in milk prices, is still feeling some of the effects of lower prices from 2015 and 2016. As always, we are diligently working with our dairy customers through these challenges and closely monitoring credits in the industry. Additionally, we continue to add key talent to our staff in all of our markets to fill open positions. Attracting top level talent has been a significant focus of our organization, and we feel very good about our team.”
Loans and Total Assets
Total assets at September 30, 2017 were $1.4 billion, an increase of $117.3 million, or 9.4%, over total assets as of December 31, 2016, and an increase of $142.8 million, or 11.7%, over total assets as of September 30, 2016. Total loans were $1.1 billion at September 30, 2017, which represents a $96.1 million, or 9.3%, increase over total loans at December 31, 2016, and a $134.1 million, or 13.5% increase over total loans at September 30, 2016. We have seen increased loan demand in our market areas; agricultural loans have increased $52.6 million and commercial loans have increased $45.1 million in 2017.
Deposits
Total deposits at September 30, 2017 were $1.1 billion, an increase of $88.6 million, or 9.1%, over total deposits as of December 31, 2016, and an increase of $136.6 million, or 14.7%, over total deposits as of September 30, 2016. While core deposit generation remains challenging in this ultra-competitive environment, we have been able to supplement our deposit needs with wholesale deposits from our brokered relationships. Brokered deposits increased $87.6 million, or 45.2%, from $193.6 million at December, 31, 2016 to $281.2 million at September 30, 2017.
Net Interest Income and Margin
As the result of increased wholesale deposits and other borrowings to fund the loan volume, net interest income decreased $0.2 million to $10.0 million for the three months ended September 30, 2017, compared to the three months ended September 30, 2016. For the nine months ended September 30, 2017, net interest income increased $3.3 million to $28.7 million from $25.4 million for the nine months ended September 30, 2016.
Net interest margin decreased to 3.17% for the three months ended September 30, 2017, compared to 3.57% for the three months ended September 30, 2016. For the nine months ended September 30, 2017, net interest margin decreased to 3.12%, compared to 3.38% for the nine months ended September 30, 2016. The decrease in margin is the result of market-driven rate compression on new loans of 0.12% and increased funding costs of 0.14%.
The net interest margin for the three and nine months ended September 30, 2016 was positively impacted by 0.25% and 0.10%, respectively, for the accretion of a fair value discount resulting from the acquisition of The Business Bank, which closed on May 13, 2016. The accretion adjustment for 2017 is immaterial.
Non-Interest Income and Expense
Non-interest income for the third quarter of 2017 increased $0.1 million to $2.1 million compared to the third quarter of 2016 and decreased $1.0 million to $5.7 million for the nine months ended September 30, 2017. The year-to-date decrease is primarily due to a $1.3 million decrease in loan servicing rights during the first three quarters of 2017. The decrease in loan servicing rights resulted from lower volumes of secondary market sales and participations due to changes in Farm Service Agency regulations.
Non-interest expense for the third quarter of 2017 increased $0.2 million to $6.3 million from the third quarter of 2016 primarily as the result of a $0.4 million increase in employee compensation and benefits expense partially offset by a $0.2 million reduction in OREO writedowns from the third quarter of 2016.
Non-interest expense year-over-year has increased from $18.1 million for the nine months ended September 30, 2016 to $18.8 million for the nine months ended September 30, 2017. The increase is related to a $2.2 million increase in employee compensation and benefits related to a 9.7% increase in headcount since September 30, 2016. This increase was partially offset by a $0.8 million reduction in information processing expenses and a $0.5 million reduction in OREO writedowns and losses on OREO sales from the same period in 2016.
Asset Quality
Non-performing assets as a percent of total assets continued to improve and decreased to 1.43% at September 30, 2017 from 1.84% at December 31, 2016 and 2.04% at September 30, 2016.
Net charge-offs for the nine months ended September 30, 2017 were $1.3 million which is a decrease of $0.1 million from the nine months ended September 30, 2016. The net charge-offs for 2017 primarily consisted of one commercial real estate relationship that was fully reserved for in the allowance for loan losses; there is no further exposure to this customer.
Provision for loan losses for the three months ended September 30, 2017 was $33,000 compared to $1.1 million for the three months ended September 30, 2016. The decreased provision is primarily the result of improved historical charge-off factors and a more stable agricultural economy which offset the 2017 loan growth.
About County Bancorp, Inc.
County Bancorp, Inc., a Wisconsin corporation and registered bank holding company founded in May 1996, and our wholly-owned subsidiary Investors Community Bank, a Wisconsin-chartered bank, are headquartered in Manitowoc, Wisconsin. The state of Wisconsin is often referred to as “America’s Dairyland,” and one of the niches we have developed is providing financial services to agricultural businesses statewide, with a primary focus on dairy-related lending. We also serve business and retail customers throughout Wisconsin, with a focus on northeastern and central Wisconsin. Our customers are served from our full-service locations in Manitowoc, Appleton, Green Bay, and Stevens Point and our loan production offices in Darlington, Eau Claire, Fond du Lac, and Sheboygan.
Forward-Looking Statements
This press release includes "forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking statements presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "plan," "seek," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology. Factors that may cause actual results to differ materially from those made or suggested by the forward-looking statements contained in this press release include those identified in County Bancorp, Inc.’s most recent annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
Investor Relations Contact
Timothy J. Schneider
CEO, Investors Community Bank
Phone: (920) 686-5604
Email: tschneider@investorscommunitybank.com
County Bancorp, Inc.
Consolidated Financial Summary (Unaudited)
| September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||
| Selected Balance Sheet Data: | ||||||||||||||||||||
| Total assets | $ | 1,359,325 | $ | 1,286,634 | $ | 1,251,414 | $ | 1,242,670 | $ | 1,217,149 | ||||||||||
| Total loans | 1,126,601 | 1,075,668 | 1,049,009 | 1,030,486 | 992,478 | |||||||||||||||
| Allowance for loan losses | (13,625 | ) | (13,503 | ) | (13,428 | ) | (12,645 | ) | (11,626 | ) | ||||||||||
| Securities available for sale, at fair value | 107,242 | 115,148 | 115,431 | 123,437 | 124,442 | |||||||||||||||
| Goodwill | 5,038 | 5,038 | 5,038 | 5,038 | 5,038 | |||||||||||||||
| Core deposit intangible, net of amortization | 1,038 | 1,165 | 1,300 | 1,441 | 1,590 | |||||||||||||||
| Deposits | 1,066,094 | 993,663 | 981,317 | 977,518 | 929,448 | |||||||||||||||
| Shareholders' equity | 139,729 | 136,254 | 134,074 | 131,288 | 128,794 | |||||||||||||||
| Common equity | 131,729 | 128,254 | 126,074 | 123,288 | 120,794 | |||||||||||||||
| Stock Price Information: | ||||||||||||||||||||
| High - Year-to-date | $ | 35.89 | $ | 35.89 | $ | 35.89 | $ | 26.97 | $ | 22.80 | ||||||||||
| Low - Year-to-date | $ | 22.73 | $ | 22.73 | $ | 24.70 | $ | 18.25 | $ | 18.25 | ||||||||||
| Market price per common share | $ | 30.05 | $ | 24.00 | $ | 29.06 | $ | 26.97 | $ | 20.01 | ||||||||||
| Book value per share | $ | 19.79 | $ | 19.31 | $ | 19.06 | $ | 18.72 | $ | 18.49 | ||||||||||
| Tangible book value per share (1) | $ | 18.87 | $ | 18.38 | $ | 18.10 | $ | 17.74 | $ | 17.48 | ||||||||||
| Average diluted shares of common stock year-to-date | 6,742,648 | 6,701,578 | 6,727,502 | 6,415,204 | 6,257,002 | |||||||||||||||
| Common shares outstanding | 6,657,601 | 6,641,159 | 6,615,232 | 6,586,335 | 6,532,776 | |||||||||||||||
| Non-Performing Assets: | ||||||||||||||||||||
| Nonaccrual loans | $ | 12,862 | $ | 12,412 | $ | 15,263 | $ | 20,107 | $ | 22,502 | ||||||||||
| Other real estate owned | 6,576 | 6,520 | 6,597 | 2,763 | 2,299 | |||||||||||||||
| Total non-performing assets | $ | 19,438 | $ | 18,932 | $ | 21,860 | $ | 22,870 | $ | 24,801 | ||||||||||
| Restructured loans not on nonaccrual | $ | 8,087 | $ | 4,523 | $ | 4,446 | $ | 4,300 | $ | 4,877 | ||||||||||
| Non-performing assets as a % of total assets | 1.43 | % | 1.47 | % | 1.75 | % | 1.84 | % | 2.04 | % | ||||||||||
| Allowance for loan losses as a % of nonaccrual loans | 105.93 | % | 108.79 | % | 87.98 | % | 62.89 | % | 51.67 | % | ||||||||||
| Allowance for loan losses as a % of total loans | 1.21 | % | 1.26 | % | 1.28 | % | 1.23 | % | 1.17 | % | ||||||||||
| Net charge-offs (recoveries) year-to-date | $ | 1,338 | $ | 1,428 | $ | (22 | ) | $ | 719 | $ | 1,195 | |||||||||
| Provision for loan loss year-to-date | $ | 2,318 | $ | 2,285 | $ | 761 | $ | 2,959 | $ | 2,416 | ||||||||||
(1) This is a non-GAAP financial measure. A reconciliation to GAAP is included below.
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||
| September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | |||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||
| Selected Income Statement Data: | ||||||||||||||||||
| Net interest income | $ | 9,961 | $ | 10,176 | $ | 28,716 | $ | 25,417 | ||||||||||
| Provision for loan losses | 33 | 1,134 | 2,318 | 2,416 | ||||||||||||||
| Net interest income after provision for loan losses | 9,928 | 9,042 | 26,398 | 23,001 | ||||||||||||||
| Non-interest income | 2,087 | 2,014 | 5,659 | 6,709 | ||||||||||||||
| Non-interest expense | 6,291 | 6,105 | 18,827 | 18,149 | ||||||||||||||
| Income tax expense | 2,120 | 1,849 | 4,936 | 4,338 | ||||||||||||||
| Net income | $ | 3,604 | $ | 3,102 | $ | 8,294 | $ | 7,223 | ||||||||||
| Return on average assets | 1.11 | % | 1.04 | % | 0.87 | % | 0.92 | % | ||||||||||
| Return on average shareholders' equity | 10.36 | % | 9.63 | % | 8.10 | % | 8.09 | % | ||||||||||
| Return on average common shareholders' equity (1) | 10.72 | % | 10.00 | % | 8.34 | % | 9.67 | % | ||||||||||
| Efficiency ratio (1) | 51.83 | % | 48.29 | % | 55.58 | % | 55.83 | % | ||||||||||
| Per Common Share Data: | ||||||||||||||||||
| Basic | $ | 0.53 | $ | 0.46 | $ | 1.21 | $ | 1.13 | ||||||||||
| Diluted | $ | 0.52 | $ | 0.46 | $ | 1.19 | $ | 1.12 | ||||||||||
| Dividends declared | $ | 0.06 | $ | 0.05 | $ | 0.18 | $ | 0.15 | ||||||||||
| Non-Interest Income: | ||||||||||||||||||
| Service charges | $ | 350 | $ | 288 | $ | 1,074 | $ | 976 | ||||||||||
| Gain on sale of loans | 47 | 79 | 96 | 240 | ||||||||||||||
| Loan servicing fees | 1,469 | 1,404 | 4,316 | 4,017 | ||||||||||||||
| Loan servicing rights | 94 | 54 | (278 | ) | 1,020 | |||||||||||||
| Income on OREO | 20 | 19 | 57 | 33 | ||||||||||||||
| Other | 107 | 170 | 394 | 423 | ||||||||||||||
| Total | $ | 2,087 | $ | 2,014 | $ | 5,659 | $ | 6,709 | ||||||||||
| Non-Interest Expense: | ||||||||||||||||||
| Employee compensation and benefits | $ | 3,845 | $ | 3,461 | $ | 11,735 | $ | 9,554 | ||||||||||
| Occupancy | 162 | 157 | 519 | 364 | ||||||||||||||
| Information processing | 450 | 288 | 1,209 | 2,045 | ||||||||||||||
| Professional fees | 414 | 304 | 1,251 | 1,337 | ||||||||||||||
| Business development | 275 | 167 | 731 | 452 | ||||||||||||||
| FDIC assessment | 99 | 163 | 287 | 424 | ||||||||||||||
| OREO expenses | 50 | 60 | 157 | 153 | ||||||||||||||
| Writedown of OREO | 8 | 250 | 85 | 334 | ||||||||||||||
| Net loss (gain) on OREO | 39 | (32 | ) | (363 | ) | (121 | ) | |||||||||||
| Depreciation and amortization | 323 | 419 | 988 | 707 | ||||||||||||||
| Other | 626 | 868 | 2,228 | 2,900 | ||||||||||||||
| Total | $ | 6,291 | $ | 6,105 | $ | 18,827 | $ | 18,149 |
(1) This is a non-GAAP financial measure. A reconciliation to GAAP is included below.
Non-GAAP Financial Measures:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
| September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | |||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Return on average common shareholders' equity reconciliation: | ||||||||||||||||||||
| Return on average shareholders' equity | 10.36 | % | 9.63 | % | 8.10 | % | 8.09 | % | ||||||||||||
| Effect of excluding average preferred shareholders' equity | 0.36 | % | 0.37 | % | 0.24 | % | 1.58 | % | ||||||||||||
| Return on average common shareholders' equity | 10.72 | % | 10.00 | % | 8.34 | % | 9.67 | % | ||||||||||||
| Efficiency ratio GAAP to non-GAAP reconciliation: | ||||||||||||||||||||
| Non-interest expense | $ | 6,291 | $ | 6,105 | $ | 18,827 | $ | 18,149 | ||||||||||||
| Less: net gain (loss) on sales and write- downs of OREO | (47 | ) | (218 | ) | 278 | (213 | ) | |||||||||||||
| Adjusted non-interest expense (non-GAAP) | $ | 6,244 | $ | 5,887 | $ | 19,105 | $ | 17,936 | ||||||||||||
| Net interest income | $ | 9,961 | $ | 10,176 | $ | 28,716 | $ | 25,417 | ||||||||||||
| Non-interest income | 2,087 | 2,014 | 5,659 | 6,709 | ||||||||||||||||
| Operating revenue | $ | 12,048 | $ | 12,190 | $ | 34,375 | $ | 32,126 | ||||||||||||
| Efficiency ratio | 51.83 | % | 48.29 | % | 55.58 | % | 55.83 | % | ||||||||||||
| September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||
| Tangible book value per share reconciliation: | ||||||||||||||||||||
| Common equity | $ | 131,729 | $ | 128,254 | $ | 126,074 | $ | 123,288 | $ | 120,794 | ||||||||||
| Less: Goodwill | 5,038 | 5,038 | 5,038 | 5,038 | 5,038 | |||||||||||||||
| Less: Core deposit intangible, net of amortization | 1,038 | 1,165 | 1,300 | 1,441 | 1,590 | |||||||||||||||
| Tangible common equity (non-GAAP) | $ | 125,653 | $ | 122,051 | $ | 119,736 | $ | 116,809 | $ | 114,166 | ||||||||||
| Common shares outstanding | 6,657,601 | 6,641,159 | 6,615,232 | 6,586,335 | 6,532,776 | |||||||||||||||
| Tangible book value per share | $ | 18.87 | $ | 18.38 | $ | 18.10 | $ | 17.74 | $ | 17.48 | ||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||
| September 30, 2017 | September 30, 2016 | |||||||||||||||||||||||
| Average Balance (1) | Income/ Expense | Yields/ Rates | Average Balance (1) | Income/ Expense | Yields/ Rates | |||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Investment securities | $ | 111,306 | $ | 543 | 1.95 | % | $ | 126,319 | $ | 510 | 1.61 | % | ||||||||||||
| Loans (2) | 1,104,259 | 13,070 | 4.73 | % | 993,156 | 12,245 | 4.93 | % | ||||||||||||||||
| Interest bearing deposits due from other banks | 41,187 | 102 | 0.99 | % | 21,480 | 48 | 0.89 | % | ||||||||||||||||
| Total interest-earning assets | $ | 1,256,752 | $ | 13,715 | 4.37 | % | $ | 1,140,955 | $ | 12,803 | 4.49 | % | ||||||||||||
| Allowance for loan losses | (13,517 | ) | (11,499 | ) | ||||||||||||||||||||
| Other assets | 59,186 | 63,588 | ||||||||||||||||||||||
| Total assets | $ | 1,302,421 | $ | 1,193,044 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Savings, NOW, money market, interest checking | $ | 224,819 | 387 | 0.69 | % | $ | 245,001 | 333 | 0.54 | % | ||||||||||||||
| Time deposits | 679,324 | 2,721 | 1.60 | % | 565,899 | 1,767 | 1.25 | % | ||||||||||||||||
| Total interest-bearing deposits | $ | 904,143 | $ | 3,108 | 1.38 | % | $ | 810,900 | $ | 2,100 | 1.04 | % | ||||||||||||
| Other borrowings | 1,384 | 20 | 5.82 | % | 2,287 | 35 | 6.12 | % | ||||||||||||||||
| FHLB advances | 136,561 | 491 | 1.44 | % | 133,815 | 373 | 1.11 | % | ||||||||||||||||
| Junior subordinated debentures | 15,506 | 135 | 3.48 | % | 15,407 | 119 | 3.09 | % | ||||||||||||||||
| Total interest-bearing liabilities | $ | 1,057,594 | $ | 3,754 | 1.42 | % | $ | 962,409 | $ | 2,627 | 1.09 | % | ||||||||||||
| Non-interest-bearing deposits | 96,717 | 93,758 | ||||||||||||||||||||||
| Other liabilities | 8,995 | 8,041 | ||||||||||||||||||||||
| Total liabilities | $ | 1,163,306 | $ | 1,064,208 | ||||||||||||||||||||
| Shareholders' equity | 139,115 | 128,836 | ||||||||||||||||||||||
| Total liabilities and equity | $ | 1,302,421 | $ | 1,193,044 | ||||||||||||||||||||
| Net interest income | $ | 9,961 | $ | 10,176 | ||||||||||||||||||||
| Interest rate spread (3) | 2.95 | % | 3.40 | % | ||||||||||||||||||||
| Net interest margin (4) | 3.17 | % | 3.57 | % | ||||||||||||||||||||
| Ratio of interest-earning assets to interest- bearing liabilities | 1.19 | 1.19 | ||||||||||||||||||||||
(1) Average balances are calculated on amortized cost.
(2) Includes loan fee income, nonaccruing loan balances, and interest received on such loans.
(3) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average total interest-earning assets.
| For the Nine Months Ended | ||||||||||||||||||||||||
| September 30, 2017 | September 30, 2016 | |||||||||||||||||||||||
| Average Balance (1) | Income/ Expense | Yields/ Rates | Average Balance (1) | Income/ Expense | Yields/ Rates | |||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Investment securities | $ | 114,528 | $ | 1,608 | 1.87 | % | $ | 104,021 | $ | 1,304 | 1.67 | % | ||||||||||||
| Loans (2) | 1,070,840 | 36,952 | 4.60 | % | 879,471 | 31,180 | 4.73 | % | ||||||||||||||||
| Interest bearing deposits due from other banks | 40,800 | 243 | 0.80 | % | 18,664 | 137 | 0.98 | % | ||||||||||||||||
| Total interest-earning assets | $ | 1,226,168 | $ | 38,803 | 4.22 | % | $ | 1,002,156 | $ | 32,621 | 4.34 | % | ||||||||||||
| Allowance for loan losses | (13,575 | ) | (11,203 | ) | ||||||||||||||||||||
| Other assets | 54,906 | 54,853 | ||||||||||||||||||||||
| Total assets | $ | 1,267,499 | $ | 1,045,806 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Savings, NOW, money market, interest checking | $ | 239,365 | 1,113 | 0.62 | % | $ | 198,428 | 774 | 0.52 | % | ||||||||||||||
| Time deposits | 644,472 | 7,238 | 1.50 | % | 511,452 | 5,133 | 1.34 | % | ||||||||||||||||
| Total interest-bearing deposits | $ | 883,837 | $ | 8,351 | 1.26 | % | $ | 709,880 | $ | 5,907 | 1.11 | % | ||||||||||||
| Other borrowings | 1,618 | 71 | 5.84 | % | 3,094 | 128 | 5.52 | % | ||||||||||||||||
| FHLB advances | 128,093 | 1,285 | 1.34 | % | 107,538 | 915 | 1.13 | % | ||||||||||||||||
| Junior subordinated debentures | 15,482 | 380 | 3.27 | % | 13,917 | 254 | 2.43 | % | ||||||||||||||||
| Total interest-bearing liabilities | $ | 1,029,030 | $ | 10,087 | 1.30 | % | $ | 834,429 | $ | 7,204 | 1.15 | % | ||||||||||||
| Non-interest-bearing deposits | 93,323 | 81,480 | ||||||||||||||||||||||
| Other liabilities | 8,665 | 7,995 | ||||||||||||||||||||||
| Total liabilities | $ | 1,131,018 | $ | 923,904 | ||||||||||||||||||||
| SBLF preferred stock (3) | - | 2,912 | ||||||||||||||||||||||
| Shareholders' equity | 136,481 | 118,990 | ||||||||||||||||||||||
| Total liabilities and equity | $ | 1,267,499 | $ | 1,045,806 | ||||||||||||||||||||
| Net interest income | $ | 28,716 | $ | 25,417 | ||||||||||||||||||||
| Interest rate spread (4) | 2.92 | % | 3.19 | % | ||||||||||||||||||||
| Net interest margin (5) | 3.12 | % | 3.38 | % | ||||||||||||||||||||
| Ratio of interest-earning assets to interest- bearing liabilities | 1.19 | 1.20 | ||||||||||||||||||||||
(1) Average balances are calculated on amortized cost.
(2) Includes loan fee income, nonaccruing loan balances, and interest received on such loans.
(3) The SBLF preferred stock refers to our Noncumulative Perpetual Preferred Stock, Series C, issued to the U.S. Treasury through the U.S. Treasury’s Small Business Lending Fund program. This stock was redeemed on February 23, 2016.
(4) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.